For 2011, net loss attributable to common stockholders was approximately $9.6 million compared to a net loss of approximately $20.9 million for 2010. For 2011, the company received an income tax benefit of $2.3 million as a result of a net loss incurred by the company’s taxable REIT subsidiaries. The loss was caused largely by disruption at 11 of the company’s hotels due to franchise termination and renovations at our hotels. For 2011, the company’s EBITDA was $35.2 million, FFO was $19.0 million, or $0.51 per fully diluted common share, and AFFO was $19.3 million, or $0.52 per fully diluted common share. The company’s normalized EBITDA was $36.5 million. The company’s EBITDA was negatively affected by approximately $1.0 million of legal costs associated with the Choice arbitration. Normalized FFO was $26.1 million, or $0.70 per fully diluted common share. The company estimates the effect of the termination of franchise licenses for 11 hotels in the first quarter of 2011 was an approximate $0.10 reduction in FFO per fully diluted common share for 2011. Normalized AFFO for the period was $26.4 million, or $0.71 per fully diluted common share.
NON-GAAP FINANCIAL MEASURES
FFO, AFFO, EBITDA and Adjusted EBITDA are non-GAAP financial measures. An explanation of these non-GAAP financial measures, as well as reconciliations of reported FFO, AFFO, EBITDA and Adjusted EBITDA to net income or loss, the most directly comparable GAAP measure, appears at the end of this release. In addition, the company has adjusted its FFO, AFFO, EBITDA and adjusted EBITDA to arrive at what it believes to be normalized amounts. These adjustments appear at the end of this release in the table reconciling FFO, AFFO, EBITDA and adjusted EBITDA to GAAP net income or loss.
The company segregates its hotel operating results for the 70 hotels it owned as of December 31, 2011 into the following components:
- Same-Store Hotels: Fifty-four hotels with an aggregate of 5,537 rooms operated for longer than one year under its current franchise. These hotels exclude the 11 rebranded hotels and the five hotels acquired during the 2011 second and third quarters.
- Rebranded Hotels: On March 23, 2011, Choice Hotels terminated franchise agreements for the company’s 11 various Choice-branded-hotels. The company has entered into arbitration with Choice to settle outstanding claims regarding steps taken by Choice.
- Recently Acquired Hotels: Five hotels were acquired during the second and third quarters of 2011.
Total revenue of $27.3 million in the fourth quarter was generated by the company’s same-stores. For the quarter, same-store revenue was up $0.8 million over fourth quarter 2010. RevPAR of $52.79 was up 3.6 percent over the same period in 2010. Fourth quarter RevPAR consisted of 59.2 percent occupancy, up 2.8 percent over fourth quarter 2010, and ADR of $89.22, up 0.7 percent over fourth quarter 2010. Same-store income from hotel operations, which, as explained above, represents same-store total revenue less same-store hotel operating expenses, were $5.8 million, up 4.2 percent over fourth quarter 2010. Hotel operating margins were 21.3 percent, expanding 20 bps when compared to the same period in 2010. Hotel operating margins expanded by 343 basis points when $0.9 million of additional public company costs were applied to income from hotel operations for the fourth quarter of 2010 on a pro forma basis. As explained above, these costs were not incurred by the company’s private company predecessor in the fourth quarter of 2010.